April 19 (Bloomberg) -- Louis Dreyfus Holding BV, a Dutch
commodities trader, will more than double grain-storage capacity
in Russia in the next four years as weather changes affect the
local harvest.

Silo capacity will expand to 4 million metric tons from 1.4
million tons, Chairwoman Margarita Louis-Dreyfus said in an
interview at a forum in Moscow.

The trader is increasing storage in Russia, which suffered
its worst drought in at least half a century in 2010 and another
in 2012 that seared a quarter of the crop. The country is
largely dependent on the weather to boost yields as it lacks the
technologies of more developed grain-producing nations.

Louis Dreyfus, which runs 12 silos in Russia and is one of
the largest wheat traders locally, doesn’t plan to expand into
grain production in the country, according to its chairwoman.
The Amsterdam-based company has some “small” grain-growing
units internationally, mainly to “test the market,” she said.

The global wheat harvest this year may climb 4.3 percent
from the previous season, reaching the second-highest on record,
as yields rebound in Russia and European farmers expand acreage,
the United Nations said in March. Wheat, the best-performing
commodity in 2012 in the Standard & Poor’s GSCI gauge of 24 raw
materials, is down about 10 percent this year.

Overcapacity may lead to “pretty low” global agriculture
prices in the new season, Louis-Dreyfus said yesterday.

Global Trading

Louis Dreyfus Commodities is present in more than 90
countries, with Europe and the Black Sea region remaining the
largest trading hub. It processes and transports about 70
million tons of food a year, according to its website, some of
which is channeled through so-called food-security programs.

The company doesn’t exclude the possibility of
participating in such a program in Egypt, the world’s biggest
wheat importer, according to Louis-Dreyfus, who said there are
no talks on such an arrangement yet.

Egypt has cut wheat imports for its subsidized bread
program by 35 percent in the 12 months through June as the
government struggles to raise funds, the U.S. Department of
Agriculture has estimated. President Mohamed Mursi is scheduled
to meet his Russian counterpart Vladimir Putin in Sochi today.